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Medigap Ratings: Choosing A+ Insurance Companies

Medigap ratings will help you choose a solid insurance company. By now, you might know that Medigap plans offer standardized benefits. What that means is that each of the letter plans, like Plan G, offers the same coverage regardless of which insurance company you buy it from. However, not all insurance companies are equal.

Many people choose their insurance carrier based on the Medigap plan’s premiums. They choose the company that is offering the lowest rate on their Medigap plan. That makes sense, right? It does! In fact, we help our clients shop at multiple carriers to ensure they get a competitive rate. Why pay more for the same level of coverage? 

The catch is that you still want to be insured by a company with good financial ratings. So, in addition to looking at premiums, you should also look at the carrier’s A.M. Best or Weiss Rating. A.M. Best is the one you should look at in particular because it looks at the global credit of companies within the insurance industry.

Ratings for Medigap Insurance Companies

Financial ratings give us an idea of the insurance carrier’s financial strength and whether they can keep up with their ongoing commitments to policyholders. Rating companies grade the carriers based on their assets and cash reserves and whether those amounts could pay an influx of medical claims.

When Medigap plans are rated, they aren’t graded on how many claims they approve or deny. Remember, if Medicare approves a claim, the Medigap plan must also pay it. The insurance company has no authority to deny Medicare-approved services.

Instead, all the rating companies look at is the financial strength of each insurance carrier. Most insurance agencies recommend carriers that are rated a B+ or above. Take a look at what the following rates mean.

  • A++ or A+ (Superior Rating)

  • A, A- (Excellent Rating)

  • B++, B+ (Good Rating)

Anything you see below these ratings should be a red flag because a lower rating indicates a vulnerability within the company. It’s risky to enroll with a carrier that has anything less than a B+ rating.

Occasionally, you may see “NR” as a rating. NR stands for Not Rated. If a company is new, or if it is a new subdivision of a larger company, it might be too early to know the ratings. As long as that company is owned by a well-known, highly-rated company, it’s usually OK to choose a plan with a current rating of NR.

medigap ratings: happy face

Ratings for Medicare Advantage Plans

While we know you came here to learn about Medigap ratings, we also want to take a moment to mention Medicare Advantage plan ratings. They do not use the same rating system, and the ratings they receive aren’t for the company as a whole. Instead, each individual Medicare Advantage plan is given its own rating.

Unlike Medigap plans, Medicare Advantage carriers do get to decide which medical treatments and services to cover. Because of this, these plans are highly regulated by CMS, the Centers for Medicare, and Medicaid Services.

If you’re considering a Medicare Advantage plan, you should still look at the rating of the insurance carrier, but you’ll need to go one step further. You will also need to look up the plan’s star ratings.

Star ratings indicate the overall quality of the plan, not it’s financial stability. Plans are rated on claims processing, customer service, provider networks, and coverage. New star ratings are released each year to update the plan’s quality. This is what each star rating means:

  • 5 Stars (Excellent)

  • 4 Stars (Above Average)

  • 3 Stars (Average)

  • 2 Stars (Below Average)

  • 1 Star (Poor)

Plans that are new to the market may not have ratings available yet. There are not many plans that have a 5-star rating, but many plans offer 3 or 4 stars. If a plan falls below a 3-star rating for several consecutive years, Medicare will allow you to change plans mid-year.

Local Medicare Specialists can help you wade through your Medigap and Medicare Advantage options. We’ll help you weigh the pros and cons of each plan and make sure you’re getting great prices. 

Chat with an insurance agent near you and get the coverage you deserve!

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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area which are United Healthcare, Aetna, Humana, Cigna, Blue Cross Blue Shield of Arizona, Centene, Devoted, and Scan. Please contact, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.

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